OTTAWA, Nov 24 (Reuters) - Troubled Canadian networking gear firm Newbridge
Networks Corp (Toronto:NNC.TO - news)(NYSE:NN - news) on Wednesday laid off 300
staff at its Ottawa-area headquarters, and announced 400 additional layoffs in its other
operations.
Newbridge, which on Tuesday cut 200 jobs in Europe and will cut another 200 in the U.S.
market next Monday, is slashing expenses after it opened the door to takeover bids last week.
With 6,200 staff remaining after the cuts, Newbridge wants to trim costs to 36 percent of sales from 46 percent. With job cuts, it is more
than halfway to that target.
``One of the things I want to stress is that we are going to move at a speed that we haven't been moving at before,' said Pearse Flynn, the
firm's new president and chief operating officer told reporters at the company's headquarters. ``That's why I've been brought in here.'
Flynn succeeded Alan Lutz whose resignation was announced on November 2.
Hammered by investors earlier this month after issuing its sixth earnings warning in 10 quarters, Newbridge faces a sales slow-down in
the booming U.S. market.
Newbridge's flagship Asynchronous Transfer Mode technology, used to send multimedia data across networks at high speed, has been
losing market share to rival Lucent Technologies Inc (NYSE:LU - news) analysts say.
Job cuts came from every division of the company, although research and development suffered least from the trimming. As part of a
restructuring plan, announced with its weak second-quarter results on November 18, staff have been shuffled among the firm's
departments.
``We've aligned our resources to succeed,' Flynn said. ``Our R&D projects have been beefed up -- our big switch developments on the 50
(gigabit) and the 450 (gigabit), which are going to be key products for us going forward, have been beefed up quite dramatically.'
The firm, which is also investing in its broadband and wireless technology, hopes the restructuring will allow it to introduce its new
products faster to regain market share.
``The U.S. market is demanding the bigger products faster, so I want to get those products out as fast as I can,' Flynn said. ``Particularly
the 450 (gigabit), which is going to give us 18 months, we believe, over Ascend (Communications Inc) (NasdaqSC:ASND - news))
Lucent.'
Flynn said that Newbridge may announce this week the outsourcing of support services, rumored to go to International Business
Machines Corp (NYSE:IBM - news). It is expected that outsourcing services, which will also cut costs, will start by late January.
Contracting out mass manufacturing is also being planned. ``(It's) going to happen very, very fast. I think some of our competitors took
six to nine months, I hope to do it in half that time,' said Flynn. ``New product introduction is something we want to keep in house...until
we have the product stable, we wouldn't outsource that.'
Flynn refused to comment on growing speculation that global telecommunications firms, including Swedish telecoms group Ericsson and
French telecoms group Alcatel Alsthom , are rumored to be bidding on Newbridge.
``We're reviewing all strategic options -- I said that to analysts and the place went wild with speculation. I don't want to comment on it any
further,' he said.
``Today life begins again for us. We've got a quarter to do which I'm very, very confident we're going to deliver on.'
($1=$1.47 Canadian) |
